Famous Life Insurance Beneficiary Disputes: Ex-Spouse Fights Automatic Revocation Statutes and Wins
Automatic revocation statutes are laws in certain states that automatically revoke the designation of an ex-spouse as a beneficiary of a life insurance policy after divorce. While these laws seem straightforward, they can lead to complex legal battles, especially when the policyholder has not updated their beneficiary designation after a divorce. Below are some significant cases where ex-spouses fought against the application of automatic revocation statutes and won.
1. Washington Supreme Court: Retroactive Application of Statute
Case Overview: In Washington, a statute automatically revoked the designation of an ex-spouse as a life insurance beneficiary after divorce. The Washington Supreme Court ruled that the statute applied retroactively to policies issued before the statute’s enactment. The court clarified that the statute did not impair the policyholder’s contractual obligations, but merely altered the default rule for beneficiary designations.
Outcome: The ex-wife was entitled to the policy proceeds, as the statute’s retroactive application did not override the policyholder’s original beneficiary designation.
2. US Court of Appeals (Second Circuit): ERISA Preemption
Case Overview: A New York statute automatically revoked an ex-spouse’s designation as a beneficiary of a retirement account after divorce. However, the court ruled that ERISA (Employee Retirement Income Security Act) preempted state law, and the federal law required honoring the policyholder's express wishes, regardless of the divorce.
Outcome: The ex-wife was entitled to the retirement account proceeds, as ERISA superseded the state statute, and the policyholder’s original wishes were honored.
3. Alabama Supreme Court: FEGLIA Preemption
Case Overview: The Alabama statute, which automatically revoked an ex-spouse’s beneficiary designation after divorce, was challenged in the context of FEGLIA (Federal Employees Group Life Insurance Act). The Alabama Supreme Court ruled that FEGLIA preempted state law, and federal law required honoring the policyholder’s express wishes.
Outcome: The ex-wife was entitled to the life insurance proceeds, as FEGLIA superseded the state’s automatic revocation statute.
4. US Supreme Court: ERISA and State Statute
Case Overview: In this case, a Washington statute automatically revoked the ex-spouse’s designation as a beneficiary of both a life insurance policy and a pension plan after divorce. The US Supreme Court ruled that ERISA preempted the state statute and required honoring the policyholder’s express wishes, regardless of the ex-spouse status.
Outcome: The ex-wife was entitled to the life insurance and pension plan proceeds, as federal law took precedence over the state statute.
5. US Court of Appeals (Eleventh Circuit): FEGLIA Preemption
Case Overview: A Florida statute that automatically revoked the designation of an ex-spouse as a beneficiary after divorce was challenged in the context of FEGLIA. The court ruled that FEGLIA preempted the state law, and federal law required honoring the original beneficiary designation, regardless of the policyholder’s marital status.
Outcome: The ex-wife was entitled to the policy proceeds, as the federal law took precedence over the Florida statute.
6. US Supreme Court: FEGLIA and Virginia Statute
Case Overview: The Virginia statute that automatically revoked the designation of an ex-spouse as a beneficiary of a life insurance policy after divorce was challenged in the context of FEGLIA. The court ruled that FEGLIA preempted state laws and invalidated the Virginia statute that allowed the current spouse or children to sue the ex-spouse for FEGLIA benefits.
Outcome: The ex-wife was entitled to the policy proceeds, as FEGLIA preempted the Virginia statute, honoring the original beneficiary designation.
7. Minnesota Supreme Court: Retroactive Statute Application
Case Overview: Minnesota had a statute that automatically revoked the ex-spouse as the beneficiary after divorce, and the Minnesota Supreme Court ruled that the statute applied retroactively to policies issued before its enactment. The court also ruled that the ex-spouse could not claim rights based on a life insurance policy if the insured failed to change the beneficiary after the divorce.
Outcome: The policyholder’s estate received the proceeds instead of the ex-wife, as the statute was retroactively applied and could not override the policyholder’s intent.
8. Ohio Supreme Court: Automatic Revocation and Waiver
Case Overview: The Ohio Supreme Court dealt with a statute that automatically revoked the ex-spouse’s designation as the beneficiary after divorce. The court ruled that the statute applied retroactively but found that the policyholder’s failure to update their beneficiary designation did not constitute a waiver of the original beneficiary.
Outcome: The estate received the policy proceeds, as the policyholder had not updated the beneficiary designation post-divorce, but the law allowed for the original designation to stand.
9. US Court of Appeals (Tenth Circuit): ERISA and Felony Exclusion
Case Overview: A Colorado statute automatically revoked the designation of an ex-spouse as a beneficiary after divorce, but the case involved a policy governed by ERISA. The court held that ERISA required honoring the policyholder’s express wishes, even if the ex-spouse was still listed as the beneficiary.
Outcome: The ex-wife received the policy proceeds, as ERISA preempted state laws regarding automatic revocation.
How Our Life Insurance Lawyers Can Help
If you’re dealing with a life insurance beneficiary dispute, especially one involving an ex-spouse and automatic revocation statutes, our experienced attorneys can assist. Here’s how we can help:
Review of Beneficiary Designations: We will review the policy and relevant statutes to understand whether an automatic revocation statute applies and whether the insured’s original intent is upheld.
Fighting Denials: If your claim is denied based on an automatic revocation statute or any other reason, we can fight for the benefits you are entitled to.
Navigating State and Federal Laws: We specialize in navigating the complexities of state and federal laws, including ERISA and FEGLIA, which often preempt state statutes.
FAQ Section
What is an automatic revocation statute?
An automatic revocation statute automatically revokes an ex-spouse as a life insurance beneficiary after divorce, depending on state laws.Can a life insurance beneficiary designation be changed after divorce?
Yes, a policyholder can change their beneficiary designation after divorce by completing the necessary forms and notifying the insurance company.What happens if the beneficiary designation is not updated after divorce?
If the designation is not updated, state laws or federal laws may determine whether the ex-spouse remains entitled to the policy benefits. Our attorneys can help you understand your options.